Small Businesses Return to Community Banks
(The Gazette) — The deleveraging spree following the 2008 economic meltdown — in which big banks dropped even their most creditworthy small and mid-sized business customers — has returned many, if not most, of these commercial borrowers to community banks.
Big banks snatched up these customers from their community bank lenders in the second half of the 1990s, offering lower interest rates and quicker credit decisions than the relationship bankers could provide, according to R. Michael Menzies, president and CEO of Easton Bank and Trust and past chairman of the Independent Community Bankers of America. When the economy soured, many small and mid-sized businesses no longer fit the credit formula, leading the biggest lenders to begin shedding them wholesale.
